Indonesia Fueling growth through affordvaluity

Indonesia: Fueling growth
through affordvaluity
Budi Isman
Indonesia: a fast growing market
Fast growing baby food market
Market value:
466
2005
+17%
555
2006
Danone is leading the baby food market
33%
753
645
25%
15%
2007
2008
Danone
Competitor 1
Competitor 2
(Market share in Value – last MAT)
(Value in € mln)
Price for GUM vs. other countries:
Indonesia:
Adjusted price per kg, 2007
Vietnam
34
China
27
Indonesia
Malaysia
Singapore
23
18
4th most populated country (230 mln)
4 mln babies born every year, 24 mln children
0-5 years old
High needs in nutrition
Lack of education about nutrition
Economy still growing in world recession
14
Source = OC&C report – Shaping and Delivering the 2012 Vision – April 2009
We operate through 2 companies
a fast-growing company
 Products imported since 1967, full local
operations with 100% NUMICO ownership
starting 1989
 develop and market products of the highest
quality and safety in Indonesia
 for healthy growth and development
an iconic company
 established in 1954 by the Government &
UNICEF
 for healthy development of children in
Indonesia
 expert of the baby food market, help by
scientists
Sari Husada is launching Gizikita to improve
nutrition of SEL C2&D children for healthy growth
Because today, there is no convenient offer answering all the needs in terms of
affordability, practicality and availability…
% population
A
Daily spend
€1.5 to €3.2
per household
11%
B
15%
C1
22%
C2
D
E
23%
18%
11%
PCC
Danone brands
Price index
280
7.1
kg/yr
5.6
180
100
kg/yr
70
0.8
kg/yr
Source = OC&C report – Shaping and Delivering the 2012 Vision – April 2009
Gizikita: affordable products with enhanced
nutrition
Milk powder (30g)
Porridge (35g)
Topping (5g)
Pregnant & lactating
women
1-2 years old
2-5 years old
Fe, Vit A, Zn,Ca,
Folic Acid: 25%
Protein: 7%
Fe, Vit A, iodin, Zn, Ca: 50%
Protein: 20%
3 SKUs
% recommended
daily intake
Fe, Vit A, iodin, Zn,Ca:
50%
Vitamin C: 20%
1 serving =
~7% of daily expenses (SEL C2 & D)
66Rp/g
57Rp/g
63Rp/g
120Rp/g
160Rp/g
75Rp/g
Source = Nielsen Sept 2009
A tailor-made business model building on Danone
strengths
Adapted R&D / purchasing
Nutritional ‘engine’ in a locally adapted
product matrix
addressing local prevalence of
malnutrition among children <5 yrs and
mothers
focusing on key micro nutrients
Low cost recipe
maximize the use of local raw materials
mix proteins coming from milk & soya
SalesAdapted
& Operations
sales
A new Route-to-market to reach C2 & D
target (traditional trade) to reach an
estimated numeric distribution of 220,000
outlets in 2014
Competitor 1
Competitor 2
Sari Husada
(in ‘000 of outlets)
61
97
120
fortified with high quality pre-mix
Any Infant Milk
Low cost packaging
single sachets
low cost filling and packing process
simple outer-boxes
/ operations
Gizikita (target)
Danone Aqua
150
+80%
220
1,300
Source = OC&C report – Shaping and Delivering the 2012 Vision – April 2009
A strong and strategic education program
Gizikita
PKPU
Nutritionists
1. Gizikita educational toolkit
= to educate mothers about nutritional needs during
pregnancy and lactating period, and for children <5 yrs
2. Validated by PKPU, a local NGO with special
status from UN ECOSOC, which also designed the
program to reach a maximum number of SEL C2 &
D mothers
3. PKPU recruits nutritionists and train them based
on Gizikita toolkit
Posyandu* cadres 4. Nutritionists gather local community health care
centers’ facilitators and train them
Mothers
5.Facilitators educate mothers using Gizikita toolkit
and hand-out simple nutritional guidelines
* Posyandu = local community health care centre
Test market: Western Java
Exploration
Sept - Oct 08
Development
Implementation
Nov 08 – Feb 09
Mar - Sept 09
Test
Q4 09 – Q1 10
Launch
Q2 2010
Western part of Java
20 mln population
13% of the Indonesian children below 5 yrs (2.3 mln)
Education program through 25,000 local community health care centers
I N D O N E
Test market area
S I A
Indonesian Urban C2D